The price action of Bittensor (TAO) has been quite interesting lately. Despite appearing in the list of trending tokens, TAO has been steadily falling in the daily charts. In the last 24 hours alone, it has lost more than 2% of its value. Its daily volume of $90 million also followed a similar trend.
In fact, liquidity levels suggest TAO may be making lower lows, while on the charts the altcoin appears to be forming the basis for a potential reversal. Hence the question: can TAO bounce back from $180 like before?
TAO Joins List of Trending Tokens as Volume Increases
According to CoinGecko, TAO is on the list of top trending tokens in the market, ranked seventh. Other tokens on this list included DeXe (DEXE), Pudgy Penguins (PENGU), and Zama Protocol (ZAMA).
This has led to an increase in on-chain activity, as evidenced by real-time trading volume. The last 200 transactions on the network have seen over 100 TAO tokens traded at once.
TAO liquidity to shape the next step
But that’s not all, as liquidity has apparently influenced TAO’s price movements more than its on-chain activity.
Over the past few days, for example, the highest liquidity was between $220 and $255, while the closest group of declines was between $185 and $190. Some of the heavier shorts have since been closed, with concentration now between $195 and $205.
Below the $185-$190 range, clusters lose relevance as longer and larger liquidations occur and depress liquidity. At the time of writing, they were between $168 and $175, with a heavier weight between $160 and $165.
This implied that bears and bulls could have repositioned, with shorts moving closer to the price while longs moving deeper away.
As long as TAO remains below $205, the altcoin remains vulnerable to further decline. Losing $185 would expose the price to $168-175 or the lower target to $160. Otherwise, the altcoin could begin to eliminate liquidity above the price level at press time.
Is a 59% increase possible?
On the 4-hour chart, TAO appears to be forming a base above the $180-185 zone. Historical performance revealed that this level remained strong in early June and resulted in a 59% rise.
However, everything did not seem to be in place for such a bullish reversal. Open Interest (OI) has declined, but has stabilized at around $127 million. This suggests a lack of purchasing power.
A resurgence in the price of Bitcoin (BTC) would benefit TAO. Especially since their correlation coefficient rose to 0.89. Otherwise, TAO remains more likely to fall below a bullish rebound.
Final summary
- Bittensor was among the top trending tokens in the market, with real-time trading volume for peak TAO.
- TAO liquidity levels suggest the altcoin may be more susceptible to a fall.
